An in-depth report from real-time charging provider, Openet, provides one of the clearest maps yet of operators’ intentions for the digital world. ‘Charging and Billing for the Digital Economy’ covers five key areas – the future of traditional billing; reducing time to market linked to innovation; loyalty strategies; future charging models and the issues surrounding cloud based billing.
Some of the findings back up the discussions already going on in the market, others point in new directions. The conclusion is that, when it comes to real-time, the game is on. There is a widely held view amongst the 80 operators interviewed that IN charging systems were designed for circuit switched voice and are therefore not fit for purpose when it comes to the real-time data world. 87 percent of the worldwide sample believe that legacy billing systems will be replaced with real-time charging systems inside four years, and 47 percent believe that this will happen inside two, driven by the arrival of LTE. This certainly backs up the conclusion of another report from research house Infonetics that the need for real-time responsiveness will trigger widespread replacement of billing and related systems.
Innovation will drive the next wave of digital offerings and operators know that to innovate they must be flexible. And fast. Reducing time to market of new offerings is a key objective and the ability to launch new services faster than the competition is now key. In the survey, the priorities that will enable this service innovation are flexible, real-time charging (79 percent); policy control integrated with charging and automated upsell based on real-time analytics. The top priority – to implement real-time charging – is perhaps not a surprising choice but the second and third deserve some attention. For a while now the industry has been discussing whether policy should be integrated with charging. Arguments for and against seemed to be evenly balanced. This survey clearly shows that operators overwhelmingly believe that policy should be integrated with charging, as almost three quarters of the respondents voted that way.
The fact that 69 percent believe that automated upsell offers based on real-time intelligence and analytics is a slight surprise. It strongly suggests that operators’ plans for analytics and real-time intelligence are more ambitious than was widely believed. The industry has been discussing goals for operators for a long time. The objective, certainly, is to be able to offer relevant services or products at the right time, in the right way. To do this, operators need to build trust and this is a risky road. Automating the offer process is obviously the way forward but care is needed that the right offer is made at the right time. If the process goes wrong or the parameters are not right, then the risk is that operators will upset, confuse and even lose customers. That so many operators see this as such as high priority points to a confidence that they can deliver.
A key finding of the report concerns centralization. 79 percent of operators believe that a centralized product catalogue is an essential part of being able to launch offers quickly and effectively. 77 percent believe that centralized convergent charging is the way forward. 76 percent want to be able to do this without any vendor intervention.
The survey goes on to suggest that the age of self-service, a step up from self care, is upon us. Almost half of respondents (48 percent) believe that the most effective way of increasing loyalty and ARPU is by enabling customers to activate services and purchase products directly from the handset. A further 26 percent believe this will be the second most effective strategy. Letting customers build their own set of services on the device is an effective way of avoiding the trap of offering the wrong services at the wrong time and therefore destroying the trust that is the operators’ key currency.
Operators intend to offer a wide range of plans and packages in the not too distant future. Right now, the plan that is offered by most operators in the survey are data passes – for instance an offer of 50 megabytes for a day for a fee. The next most popular currently out there are data roaming passes as operators begin to prepare for the end of data roaming across Europe. Operators’ plans are wide ranging when it comes to the next wave of services – the most popular being multi-device plans; speed tiers; Voice over LTE; payment gateways to enable in-app charging and ‘free’ Facebook video for example. Following these are a rich range of shared data plans, sponsored sites, time of day pricing (back to the future) and premium content bundles.
An interesting section of the survey deals with Rich Communications Services (RCS). An almost equal number – 42 percent and 43 percent – intend to launch RCS messaging services, and intend to leave that to the Over the Top (OTT) messaging companies such as Skype, Viber and WhatsApp. This, again, reflects an important debate in the industry – whether to treat OTT players as friend or foe. Initially, operators reacted to messaging companies by seeing them as hugely competitive and they were clearly eroding their revenues. Now the thinking is changing and operators are seeing a bigger opportunity in partnering with these companies. Using billing expertise, for instance, they are making the digital experience of companies such as Facebook more intuitive. Direct Operator Billing (DOB) has gone from concept to success story in a few short months and Telefonica Digital’s BlueVia service has increased the company’s revenues from payments by 300 percent, increasing the percentage of overall purchase at the same time.
This report is an excellent snap shot of operators’ views of the future and of their near term plans. Some elements confirm and reinforce what the industry believed to be the case and some points to operators being even more ambitious in their thinking than was previously believed.
More analysis of the report to come.
These things start as 1 and end up as 2.Over the next 2 years there will be hagrwdinning about the right way to do this internally and how we’ve talked to customers about it’ (note talked *to* not observed or talked *with*). And how it hasn’t saved the company money.It’s primarily driven by people who want to create websites (hey did you see my billing website) as opposed to people want to solve problems (hey did you notice how that thing isn’t there anymore that was me).I think the marketers of FMCG goods (who have to shout all the time) have a lot to answer for as they try and apply these skills in the service industry (which is about being invisible as you state in your Trade Me manifesto post about being like electricity).
Alex:
This issue seems to beg for the only technology-agnostic IP-service usage approach in existence, TM Forum’s IPDR(C) (Internet Protocol Detail Record). It is deployed, world-wide in support of every DOCSIS cable modem (approaching 100 million devices), and has been adopted as the data interface by the Broadband Forum in their TR-232 standard, which will bring the devices under IPDR management to over a quarter billion.
Regards,
Steve Cotton
Director, Business Assurance Programs
TM Forum